Penny Stock Play of the Week: PKPL

PKPL has a forward split currently scheduled for Monday, August 31st (note: it has already been rescheduled once, it could happen again... you've been warned). Nonetheless anyone who has had an experience with a forward split knows that the price tends to build up quite a bit leading into the split and then, of course, as the shares are added the sell off occurs. This split is scheduled for a hefty 10:1, meaning shareholders of record will recieve 10 shares for every 1 share owned. To be a 'shareholder of record' means that you would need to own stock before August 31st (however these stocks have a history of doing a rather inadequate job of living up to their dates, see: the recent AMNE split). My advice would be to follow the progress on this thing over the next few days and set a nice safe limit according to how this stock is reacting and pick up your shares before this Friday's close.

Now there are 2 ways to play this split... The short term play is my favorite and that's done easily by loading up on shares at a low this week (it could be now for all we know) and then selling off at Mondays high before the split occurs (remember, if the split for some reason gets rescheduled again you will see a relatively dangerous pullback, it's the risk we take). The other play is to go long in hopes of the split doing its job of enticing potential stockholders to bite at the lower price, producing higher volumes and a more interesting trading environment when 'the news comes' (information on the progress of their recently announced joint venture should be resurfacing within the next few weeks). However, take into account that you will be depending on your stockbrocker for the delivery of your shares, for instance if you have E-Trade, chances are it will take you a few days before you get your shares and by then most other brokers will have already distributed their shares and those owners will have probably sold out... However, if you are truely going long with this stock, this shouldn't really play much of a factor in your decision (unless the news comes in that 1-3 day span where you have yet to get your shares and you are screwed... again you have been warned). Like I said, I feel the short-term play looks best right now and it should be able to give you some nice bang for your buck, I'm forcasting a solid 15-50% short-term flip (depending on the markets awareness of the split, and how low you are able to get in)

Good Luck!